### FORM 10-Q

#### UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D. C.  20549

# [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

# For the quarterly period ended September 30, 2004

# OR

# [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

# For the transition period from ___ to ___

# Commission File Number 333-42425

# Protective Life and Annuity Insurance Company

| |  | ALABAMA | 63-0761690
| |  | ------- | ----------
|
|

# 2801 HIGHWAY 280 SOUTHBIRMINGHAM, ALABAMA 35223

Indicate by check mark whether the registrant (1) has filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934  during the  preceding  12 months (or for such shorter period that
the registrant was required to file such reports),  and (2) has been  subject to such
filing requirements for the past 90 days. Yes [X] No[ ]

Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act).  Yes [ ]  No [X]

Number of shares of Common Stock, $10.00 par value,  outstanding
as of November 12, 2004: 250,000 shares.

The registrant meets the conditions set forth in General
Instruction  H(1)(a)and (b) of Form 10-Q and is therefore filing this form
with  the   reduced   disclosure   format   pursuant   to  General   Instruction
H(2).

# PROTECTIVE LIFE AND
ANNUITY INSURANCE COMPANY

INDEX

`Page Number

Part I.  Financial Information:
   Item 1.  Financial Statements (unaudited):
       Report of Independent Registered Public Accounting Firm...........................................
       Condensed Statements of Income for the Three and Nine Months
           ended September 30, 2004 and 2003.............................................................
       Condensed Balance Sheets as of September 30, 2004
           and December 31, 2003.........................................................................
       Condensed Statements of Cash Flows for the
           Nine Months ended September 30, 2004 and 2003.................................................
       Notes to Condensed Financial Statements...........................................................

   Item 2.  Management's Narrative Analysis of the Results of Operations.................................
   Item 4.  Controls and Procedures......................................................................

Part II.  Other Information:
   Item 6.  Exhibits.....................................................................................

Signature................................................................................................`

# REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To Directors and Share
OwnersProtective Life and Annuity Insurance Company

We have reviewed the accompanying
condensed balance sheet of Protective Life and Annuity Insurance Company as of September
30, 2004, and the related condensed statements of income for each of the three-month and
nine-month periods ended September 30, 2004 and 2003 and the condensed statements of cash
flows for the nine-month periods ended September 30, 2004 and 2003. These interim
financial statements are the responsibility of the Companys management.

We conducted our review in accordance
with the standards of the Public Company Accounting Oversight Board (United States). A
review of interim financial information consists principally of applying analytical
procedures and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.

Based on our review, we are not aware
of any material modifications that should be made to the accompanying condensed interim
financial statements for them to be in conformity with accounting principles generally
accepted in the United States of America.

We previously audited in accordance
with the standards of the Public Company Accounting Oversight Board (United States), the
balance sheet as of December 31, 2003, and the related statements of income,
share-owners equity and cash flows for the year then ended (not presented herein),
and in our report dated March 11, 2004, we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth in the accompanying
condensed balance sheet as of December 31, 2003, is fairly stated in all material respects
in relation to the balance sheet from which it has been derived.

PricewaterhouseCoopers LLPBirmingham, Alabama November 15, 2004

# PROTECTIVE LIFE AND
ANNUITY INSURANCE COMPANYCONDENSED STATEMENTS
OF INCOME

(Unaudited)

`THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                                               SEPTEMBER 30                       SEPTEMBER 30
                                                                            2004              2003             2004               2003
----------------------------------------------------------------------------------------------------------------------------------------
REVENUES
  Premiums and policy fees                                             $15,131,853      $ 17,610,353    $ 47,056,839       $ 55,766,165
  Reinsurance ceded                                                     (8,915,447)      (11,180,601)    (27,717,731)       (35,866,491)
----------------------------------------------------------------------------------------------------------------------------------------
    Premiums and policy fees, net of reinsurance ceded                   6,216,406         6,429,752      19,339,108         19,899,674
  Net investment income                                                  9,871,369         9,840,689      30,221,274         30,698,992
  Realized investment gains (losses)                                       367,756         1,106,032         418,215          3,384,562
  Other income                                                              17,303             6,545          37,926            149,199
----------------------------------------------------------------------------------------------------------------------------------------
                                                                        16,472,834        17,383,018      50,016,523         54,132,427
----------------------------------------------------------------------------------------------------------------------------------------
BENEFITS AND EXPENSES
  Benefits and settlement expenses
  (net of reinsurance ceded:
    three months: 2004 - $6,530,338; 2003 - $8,319,739
    nine months: 2004 - $19,277,582; 2003 - $22,851,317)                 8,537,530         8,143,085      24,579,833         24,264,248
  Amortization of deferred policy acquisition costs                      1,793,515         1,956,536       5,166,729          6,040,291
  Other operating expenses (net of reinsurance ceded:
    three months: 2004 - $290,685; 2003 - $(168,669)
    nine months: 2004 - $149,180; 2003 - $(1,566,318))                   1,971,461         1,752,609       6,163,704          6,093,527
----------------------------------------------------------------------------------------------------------------------------------------
                                                                        12,302,506        11,852,230      35,910,266         36,398,066
----------------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAX                                                 4,170,328         5,530,788      14,106,257         17,734,361
Income tax expense                                                       1,354,306         1,934,028       4,821,896          6,193,450
----------------------------------------------------------------------------------------------------------------------------------------
NET INCOME                                                             $ 2,816,022      $  3,596,760    $  9,284,361       $ 11,540,911
========================================================================================================================================`

See notes to condensed
financial statements

# PROTECTIVE LIFE AND
ANNUITY INSURANCE COMPANY CONDENSED BALANCE
SHEETS

# (Unaudited)

`SEPTEMBER 30            DECEMBER 31
                                                                                                  2004                   2003
-----------------------------------------------------------------------------------------------------------------------------------
ASSETS
  Investments:
   Fixed maturities, at market
   (amortized cost: 2004 - $578,262,605; 2003 - $598,941,913)                                 $621,154,249           $636,460,275
   Mortgage loans on real estate                                                                 1,234,936              1,393,720
   Policy loans                                                                                 53,274,385             54,066,125
   Short-term investments                                                                       11,328,474              1,200,413
-----------------------------------------------------------------------------------------------------------------------------------
      Total investments                                                                        686,992,044            693,120,533
  Cash                                                                                          17,206,935             13,052,781
  Accrued investment income                                                                      9,821,811             11,116,301
  Accounts and premiums receivable, net of allowance
    for uncollectible amounts                                                                      592,964                530,133
  Reinsurance receivables                                                                       42,399,512             61,159,477
  Deferred policy acquisition costs                                                             94,521,081             95,168,662
  Other assets                                                                                      12,072                 14,897
  Assets related to separate accounts
    Variable Annuity                                                                             9,930,735             10,987,259
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                              $861,477,154           $885,150,043
===================================================================================================================================
LIABILITIES
  Policy liabilities and accruals:
    Future policy benefits and claims                                                         $488,124,396           $496,884,724
    Unearned premiums                                                                            8,612,091             13,824,017
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                               496,736,487            510,708,741
  Annuity account balances                                                                      58,659,050             57,894,232
  Other policyholders' funds                                                                     2,615,575              2,695,070
  Funds held-coinsurance                                                                        27,792,805             46,762,354
  Other liabilities                                                                              9,163,390             15,506,447
 Accrued income taxes                                                                            1,052,378                702,883
 Deferred income taxes                                                                          38,711,605             36,842,882
  Liabilities related to separate accounts
    Variable Annuity                                                                             9,930,735             10,987,259
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                               644,662,025            682,099,868
-----------------------------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENT LIABILITIES - NOTE B
SHARE-OWNERS' EQUITY
  Preferred Stock, $1.00 par value, shares authorized and issued: 2,000                              2,000                  2,000
  Common Stock, $10.00 par value,
     Shares authorized: 500,000
     Shares issued and outstanding: 250,000                                                      2,500,000              2,500,000
  Additional paid-in capital                                                                   171,386,324            171,386,324
  Retained earnings                                                                             21,694,894             12,410,533
  Accumulated other comprehensive income:
     Net unrealized gains on investments (net of income tax:
       2004 - $11,432,567; 2003 - $9,019,940)                                                   21,231,911             16,751,318
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                               216,815,129            203,050,175
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                              $861,477,154           $885,150,043
===================================================================================================================================`

See notes to condensed
financial statements

# PROTECTIVE LIFE AND
ANNUITY INSURANCE COMPANY CONDENSED STATEMENTS
OF CASH FLOWS

(Unaudited)

`NINE MONTHS ENDED
                                                                                                       SEPTEMBER 30
                                                                                                    2004              2003
---------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                                                 $   9,284,361      $  11,540,911
   Adjustments to reconcile net income to net cash used in
   operating activities:
     Realized investment (gains) losses                                                            (418,215)        (3,384,562)
     Amortization of deferred policy acquisition costs                                            5,166,729          6,040,291
     Capitalization of deferred policy acquisition costs                                         (3,030,569)        (2,093,465)
     Deferred income tax                                                                           (543,904)         6,193,450
     Interest credited to universal life and investment products                                 15,559,193         16,227,425
     Policy fees assessed on universal life and investment products                             (25,010,058)       (25,560,549)
     Change in accrued investment income and other receivables                                   19,991,624         25,650,067
     Change in policy liabilities and other policyholders' funds of traditional
       life and health products                                                                 (16,173,848)       (32,402,227)
     Change in funds held-coinsurance                                                           (18,969,549)       (33,630,580)
     Change in other liabilities                                                                 (5,993,562)           426,165
     Other, net                                                                                       2,825              7,771
---------------------------------------------------------------------------------------------------------------------------------
   Net cash used in operating activities                                                        (20,134,973)       (30,985,303)
---------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Investments available for sale, net of short-term investments:
     Maturities and principal reductions of investments                                          30,561,277         75,396,414
     Sale of investments                                                                         15,736,724         81,324,718
     Cost of investments acquired                                                               (25,169,119)      (297,345,743)
   Change in mortgage loans, net                                                                    158,784            149,972
   Change in policy loans, net                                                                      791,740            960,906
   Change in short-term investments, net                                                        (10,128,061)       176,171,941
---------------------------------------------------------------------------------------------------------------------------------
   Net cash provided by investing activities                                                     11,951,345         36,658,208
---------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Investment product deposits and change in universal life deposits                             20,040,279         18,948,427
   Investment product withdrawals                                                                (7,702,497)        (9,288,988)
---------------------------------------------------------------------------------------------------------------------------------
   Net cash provided by financing activities                                                     12,337,782          9,659,439
---------------------------------------------------------------------------------------------------------------------------------
CHANGE IN CASH                                                                                    4,154,154         15,332,344
CASH AT BEGINNING OF PERIOD                                                                      13,052,781          1,669,532
---------------------------------------------------------------------------------------------------------------------------------
CASH AT END OF PERIOD                                                                         $  17,206,935      $  17,001,876
=================================================================================================================================`

See notes to condensed
financial statements

# PROTECTIVE LIFE AND
ANNUITY INSURANCE COMPANY NOTES TO CONDENSED
FINANCIAL STATEMENTS(Unaudited)

NOTE A  BASIS OF
PRESENTATION

The
accompanying unaudited condensed financial statements of Protective Life and Annuity
Insurance Company (the Company) have been prepared on the basis of accounting
principles generally accepted in the United States of America (GAAP) for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the disclosures required by GAAP for complete
financial statements. In the opinion of management, all adjustments (consisting only of
normal recurring accruals) necessary for a fair statement have been included. Operating
results for the nine-month period ended September 30, 2004 are not necessarily indicative
of the results that may be expected for the year ending December 31, 2004. The year-end
condensed balance sheet data was derived from audited financial statements, but does not
include all disclosures required by GAAP. For further information, refer to the financial
statements and notes thereto included in the Companys annual report on Form 10-K for
the year ended December 31, 2003.

Certain
reclassifications have been made in the previously reported financial statements and
accompanying notes to make the prior year amounts comparable to those of the current year.
Such reclassifications had no effect on previously reported net income, total assets, or
share-owners equity.

All
outstanding shares of the Companys common stock are owned by Protective Life
Insurance Company (Protective), which is a wholly owned subsidiary of
Protective Life Corporation (PLC). All outstanding shares of the
Companys preferred stock are owned by PLC.

With
respect to the unaudited condensed financial information of Protective Life and Annuity
Insurance Company for the three-month and nine-month periods ended September 30, 2004
and 2003, PricewaterhouseCoopers LLP (PricewaterhouseCoopers) reported that
they have applied limited procedures in accordance with professional standards for a
review of such information. However, their separate report dated November 15, 2004,
appearing herein, stated that they did not audit and they do not express an opinion on
that unaudited condensed financial information. Accordingly, the degree of reliance on
their report on such information should be restricted in light of the limited nature of
the review procedures applied. PricewaterhouseCoopers is not subject to the liability
provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited
condensed financial information because that report is not a report or a
part of a registration statement prepared or certified by
PricewaterhouseCoopers into which this Form 10-Q may be incorporated by reference within
the meaning of Sections 7 and 11 of the Act.

NOTE B  COMMITMENTS
AND CONTINGENT LIABILITIES

Under
insurance guaranty fund laws, in most states insurance companies doing business therein
can be assessed up to prescribed limits for policyholder losses incurred by insolvent
companies. The Company does not currently believe such assessments will be materially
different from amounts already provided for in the financial statements. Most of these
laws do provide, however, that an assessment may be excused or deferred if it would
threaten an insurers own financial strength.

A
number of civil jury verdicts have been returned against insurers and other providers of
financial services involving sales practices, alleged agent misconduct, failure to
properly supervise representatives relationships with agents or other persons with
whom the insurer does business, and other matters. Increasingly these lawsuits have
resulted in the award of substantial judgments that are disproportionate to the actual
damages, including material amounts of punitive and non-economic compensatory damages. In
some states, juries, judges, and arbitrators have substantial discretion in awarding
punitive and non-economic compensatory damages which creates the potential for
unpredictable material adverse judgments or awards in any given lawsuit or arbitration.
Arbitration awards are subject to very limited appellate review. In addition, in some
class action and other lawsuits, companies have made material settlement payments. The
Company, like other financial services companies, in the ordinary course of business, is
involved in such litigation and in arbitration. Although the outcome of any such
litigation or arbitration cannot be predicted, the Company believes that at the present
time there are no pending or threatened lawsuits that are reasonably likely to have a
material adverse effect on the financial position, results of operation, or liquidity of
the Company.

NOTE C  OPERATING
SEGMENTS

PLC,
through its subsidiaries, operates several business segments. An operating segment is
generally distinguished by products and/or channels of distribution. A brief description
of each segment in which the Company operates follows:

| | Life
Marketing. The Life Marketing segment markets level premium term and term-like
insurance and universal life products on a national basis
primarily through networks of independent insurance agents and brokers, and in the
bank owned life insurance market.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Acquisitions.
           The Acquisitions segment focuses on acquiring, converting, and servicing
          policies acquired from other companies. The segments primary focus is on
          life insurance policies sold to individuals.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Annuities.
           The Annuities segment manufactures, sells, and supports fixed annuity products.
          These products are primarily sold through stockbrokers, but are also sold
          through financial institutions and the Life Marketing segments sales
          force. It also supports variable annuity products sold prior to 2003 when the
          Company ceased marketing those products.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Asset
Protection. The Asset Protection segment primarily markets credit life and disability
insurance products to protect consumers investments in automobiles and watercraft.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Corporate
and Other. The Company has an additional segment herein referred to as Corporate and
Other. The Corporate and Other segment primarily consists of net investment income and
expenses not attributable to the segments above (including net investment income on
unallocated capital).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
Company uses the same accounting policies and procedures to measure segement operating
income and assets as it uses to measure its net income and assets. Segment operating
income is generally income before income tax, adjusted to exclude net realized investment
gains and losses. Segment operating income represents the basis on which the performance
of the Companys business is assessed by management. Premiums and policy fees, other
income, benefits and settlement expenses, and amortization of deferred policy acquisition
costs are attributed directly to each operating segment. Net investment income is
allocated based on directly related assets required for transacting the business of that
segment. Realized investment gains (losses) and other operating expenses are allocated to
the segments in a manner which appropriately reflects the operations of that segment.

Assets
are allocated based on policy liabilities directly attributable to each segment and
deferred policy acquisition costs are shown in the segments to which they are
attributable.

There
are no significant intersegment transactions.

The
following table sets forth total segment operating income and assets for the period shown.
Income adjustments represent the recognition of income tax expense. Asset adjustments
represent the inclusion of assets related to discontinued operations.

`Segment Operating Income for the
                                                                         Nine Months Ended September 30, 2004
-----------------------------------------------------------------------------------------------------------------------------------
                                                                         Life
                                                                       Marketing             Acquisitions            Annuities
-----------------------------------------------------------------------------------------------------------------------------------

Premiums and policy fees                                             $ 4,875,864            $ 28,435,586           $   259,713
Reinsurance ceded                                                     (4,589,863)            (12,159,673)
-----------------------------------------------------------------------------------------------------------------------------------
   Net of reinsurance ceded                                              286,001              16,275,913               259,713
Net investment income                                                     17,542              21,669,852             2,830,978
Realized investment gains                                                                                              248,743
Other income                                                               9,488                                        23,455
-----------------------------------------------------------------------------------------------------------------------------------
       Total revenue                                                     313,031              37,945,765             3,362,889
-----------------------------------------------------------------------------------------------------------------------------------
Benefits and settlement expenses                                          (2,285)             20,492,911             2,666,484
Amortization of deferred policy acquisition costs                        387,639               3,917,681               289,357
Other operating expenses                                                (641,448)              6,161,941               134,309
-----------------------------------------------------------------------------------------------------------------------------------
       Total benefits and expenses                                      (256,094)             30,572,533             3,090,150
-----------------------------------------------------------------------------------------------------------------------------------
Income before income tax                                                 569,125               7,373,232               272,739
Less: realized investment gains                                                                                        248,743
-----------------------------------------------------------------------------------------------------------------------------------
Operating income (loss)                                                  569,125               7,373,232                23,996



-----------------------------------------------------------------------------------------------------------------------------------
                                                               Asset             Corporate                              Total
                                                             Protection          and Other         Adjustments      Consolidated
-----------------------------------------------------------------------------------------------------------------------------------

Premiums and policy fees                                    $ 13,485,676                                             $ 47,056,839
Reinsurance ceded                                            (10,968,195)                                             (27,717,731)
-----------------------------------------------------------------------------------------------------------------------------------
   Net of reinsurance ceded                                    2,517,481                                               19,339,108
Net investment income                                            375,390          $5,327,512                           30,221,274
Realized investment gains (losses)                                                   169,472                              418,215
Other income                                                                           4,983                               37,926
-----------------------------------------------------------------------------------------------------------------------------------
       Total revenue                                           2,892,871           5,501,967                           50,016,523
-----------------------------------------------------------------------------------------------------------------------------------
Benefits and settlement expenses                               1,422,723                                               24,579,833
Amortization of deferred policy acquisition costs                572,052                                                5,166,729
Other operating expenses                                         341,839             167,063                            6,163,704
-----------------------------------------------------------------------------------------------------------------------------------
       Total benefits and expenses                             2,336,614             167,063                           35,910,266
-----------------------------------------------------------------------------------------------------------------------------------
Income before income tax                                         556,257           5,334,904                           14,106,257
Less: realized investment gains (losses)                                             169,472
-----------------------------------------------------------------------------------------------------------------------------------
Operating income                                                 556,257           5,165,432
Income tax expense                                                                                  $4,821,896          4,821,896
-----------------------------------------------------------------------------------------------------------------------------------
Net income                                                                                                           $  9,284,361
===================================================================================================================================






                                                                            Segment Operating Income for the
                                                                         Three Months Ended September 30, 2004
-----------------------------------------------------------------------------------------------------------------------------------
                                                                         Life
                                                                       Marketing             Acquisitions            Annuities
-----------------------------------------------------------------------------------------------------------------------------------

Premiums and policy fees                                              $1,843,384             $ 9,305,944             $  58,587
Reinsurance ceded                                                     (1,739,408)             (4,087,420)
-----------------------------------------------------------------------------------------------------------------------------------
   Net of reinsurance ceded                                              103,976               5,218,524                58,587
Net investment income                                                      6,260               7,162,370               950,885
Realized investment gains                                                                                               26,982
Other income                                                               9,487                                         7,816
-----------------------------------------------------------------------------------------------------------------------------------
       Total revenue                                                     119,723              12,380,894             1,044,270
-----------------------------------------------------------------------------------------------------------------------------------
Benefits and settlement expenses                                         (11,990)              7,348,857               773,844
Amortization of deferred policy acquisition costs                        160,975               1,330,943               102,182
Other operating expenses                                                (271,822)              1,979,078                64,423
-----------------------------------------------------------------------------------------------------------------------------------
       Total benefits and expenses                                      (122,837)             10,658,878               940,449
-----------------------------------------------------------------------------------------------------------------------------------
Income before income tax                                                 242,560               1,722,016               103,821
Less: realized investment gains                                                                                         26,982
-----------------------------------------------------------------------------------------------------------------------------------
Operating income (loss)                                                  242,560               1,722,016                76,839



-----------------------------------------------------------------------------------------------------------------------------------
                                                                Asset             Corporate                              Total
                                                              Protection          and Other         Adjustments      Consolidated
-----------------------------------------------------------------------------------------------------------------------------------

Premiums and policy fees                                     $ 3,923,938                                              $15,131,853
Reinsurance ceded                                             (3,088,619)                                              (8,915,447)
-----------------------------------------------------------------------------------------------------------------------------------
   Net of reinsurance ceded                                      835,319                                                6,216,406
Net investment income                                            120,802          $1,631,052                            9,871,369
Realized investment gains (losses)                                                   340,774                              367,756
Other income                                                                                                               17,303
-----------------------------------------------------------------------------------------------------------------------------------
       Total revenue                                             956,121           1,971,826                           16,472,834
-----------------------------------------------------------------------------------------------------------------------------------
Benefits and settlement expenses                                 426,819                                                8,537,530
Amortization of deferred policy acquisition costs                199,415                                                1,793,515
Other operating expenses                                         106,052              93,730                            1,971,461
-----------------------------------------------------------------------------------------------------------------------------------
       Total benefits and expenses                               732,286              93,730                           12,302,506
-----------------------------------------------------------------------------------------------------------------------------------
Income before income tax                                         223,835           1,878,096                            4,170,328
Less: realized investment gains (losses)                                             340,774
-----------------------------------------------------------------------------------------------------------------------------------
Operating income                                                 223,835           1,537,322
Income tax expense                                                                                  $1,354,306          1,354,306
-----------------------------------------------------------------------------------------------------------------------------------
Net income                                                                                                            $ 2,816,022
===================================================================================================================================






                                                                            Segment Operating Income for the
                                                                         Nine Months Ended September 30, 2003
-----------------------------------------------------------------------------------------------------------------------------------
                                                                         Life
                                                                       Marketing             Acquisitions            Annuities
-----------------------------------------------------------------------------------------------------------------------------------
Premiums and policy fees                                              $2,507,808             $30,069,926            $  237,924
Reinsurance ceded                                                     (2,449,295)            (13,106,178)
-----------------------------------------------------------------------------------------------------------------------------------
   Net of reinsurance ceded                                               58,513              16,963,748               237,924
Net investment income                                                     29,854              21,948,904             2,789,867
Realized investment gains (losses)                                                                                     262,490
Other income                                                                                      (5,045)               17,613
-----------------------------------------------------------------------------------------------------------------------------------
       Total revenue                                                      88,367              38,907,607             3,307,894
-----------------------------------------------------------------------------------------------------------------------------------
Benefits and settlement expenses                                         (58,639)             19,543,055             3,010,433
Amortization of deferred policy acquisition costs                        259,529               4,984,842               209,070
Other operating expenses                                                (573,248)              6,394,212               134,135
-----------------------------------------------------------------------------------------------------------------------------------
       Total benefits and expenses                                      (372,358)             30,922,109             3,353,638
-----------------------------------------------------------------------------------------------------------------------------------
Income before income tax                                                 460,725               7,985,498               (45,744)
Less: realized investment gains (losses)                                                                               262,490
-----------------------------------------------------------------------------------------------------------------------------------
Operating income (loss)                                                  460,725               7,985,498              (308,234)



-----------------------------------------------------------------------------------------------------------------------------------
                                                                Asset             Corporate                              Total
                                                              Protection          and Other         Adjustments      Consolidated
-----------------------------------------------------------------------------------------------------------------------------------

Premiums and policy fees                                     $22,950,507                                              $55,766,165
Reinsurance ceded                                            (20,311,018)                                             (35,866,491)
-----------------------------------------------------------------------------------------------------------------------------------
   Net of reinsurance ceded                                    2,639,489                                               19,899,674
Net investment income                                            370,711          $5,559,656                           30,698,992
Realized investment gains (losses)                                                 3,122,072                            3,384,562
Other income                                                                         136,631                              149,199
-----------------------------------------------------------------------------------------------------------------------------------
       Total revenue                                           3,010,200           8,818,359                           54,132,427
-----------------------------------------------------------------------------------------------------------------------------------
Benefits and settlement expenses                               1,769,399                                               24,264,248
Amortization of deferred policy acquisition costs                586,850                                                6,040,291
Other operating expenses                                         113,788              24,640                            6,093,527
-----------------------------------------------------------------------------------------------------------------------------------
       Total benefits and expenses                             2,470,037              24,640                           36,398,066
-----------------------------------------------------------------------------------------------------------------------------------
Income before income tax                                         540,163           8,793,719                           17,734,361
Less: realized investment gains (losses)                                           3,122,072
-----------------------------------------------------------------------------------------------------------------------------------
Operating income                                                 540,163           5,671,647
Income tax expense                                                                                  $6,193,450          6,193,450
-----------------------------------------------------------------------------------------------------------------------------------
Net income                                                                                                            $11,540,911
===================================================================================================================================






                                                                            Segment Operating Income for the
                                                                         Three Months Ended September 30, 2003
-----------------------------------------------------------------------------------------------------------------------------------
                                                                         Life
                                                                       Marketing             Acquisitions            Annuities
-----------------------------------------------------------------------------------------------------------------------------------
Premiums and policy fees                                                $978,362             $ 9,806,651           $    74,045
Reinsurance ceded                                                       (905,587)             (4,404,257)
-----------------------------------------------------------------------------------------------------------------------------------
   Net of reinsurance ceded                                               72,775               5,402,394                74,045
Net investment income                                                      6,730               7,064,121               919,847
Realized investment gains (losses)                                                                                     112,670
Other income                                                                                                             6,545
-----------------------------------------------------------------------------------------------------------------------------------
       Total revenue                                                      79,505              12,466,515             1,113,107
-----------------------------------------------------------------------------------------------------------------------------------
Benefits and settlement expenses                                          52,342               6,645,332             1,004,094
Amortization of deferred policy acquisition costs                         (3,423)              1,648,941               112,573
Other operating expenses                                                (347,526)              1,973,992                48,459
-----------------------------------------------------------------------------------------------------------------------------------
       Total benefits and expenses                                      (298,607)             10,268,265             1,165,126
-----------------------------------------------------------------------------------------------------------------------------------
Income before income tax                                                 378,112               2,198,250               (52,019)
Less: realized investment gains (losses)                                                                               112,670
-----------------------------------------------------------------------------------------------------------------------------------
Operating income (loss)                                                  378,112               2,198,250              (164,689)



-----------------------------------------------------------------------------------------------------------------------------------
                                                                Asset             Corporate                              Total
                                                              Protection          and Other         Adjustments      Consolidated
-----------------------------------------------------------------------------------------------------------------------------------

Premiums and policy fees                                      $6,751,295                                              $17,610,353
Reinsurance ceded                                             (5,870,757)                                             (11,180,601)
-----------------------------------------------------------------------------------------------------------------------------------
   Net of reinsurance ceded                                      880,538                                                6,429,752
Net investment income                                            127,556          $1,722,435                            9,840,689
Realized investment gains (losses)                                                   993,362                            1,106,032
Other income                                                                                                                6,545
-----------------------------------------------------------------------------------------------------------------------------------
       Total revenue                                           1,008,094           2,715,797                           17,383,018
-----------------------------------------------------------------------------------------------------------------------------------
Benefits and settlement expenses                                 441,317                                                8,143,085
Amortization of deferred policy acquisition costs                198,445                                                1,956,536
Other operating expenses                                          42,685              34,999                            1,752,609
-----------------------------------------------------------------------------------------------------------------------------------
       Total benefits and expenses                               682,447              34,999                           11,852,230
-----------------------------------------------------------------------------------------------------------------------------------
Income before income tax                                         325,647           2,680,798                            5,530,788
Less: realized investment gains (losses)                                             993,362
-----------------------------------------------------------------------------------------------------------------------------------
Operating income                                                 325,647           1,687,436
Income tax expense                                                                                  $1,934,028          1,934,028
-----------------------------------------------------------------------------------------------------------------------------------
Net income                                                                                                            $ 3,596,760
===================================================================================================================================







                                                                       Operating Segment Assets
                                                                           September 30, 2004
-----------------------------------------------------------------------------------------------------------------------------------
                                                                   Life
                                                                 Marketing               Acquisitions            Annuities
-----------------------------------------------------------------------------------------------------------------------------------

Investments and other assets                                    $5,554,819               $556,673,045           $57,858,590
Deferred policy acquisition costs                                3,619,888                 87,480,079             2,112,432
-----------------------------------------------------------------------------------------------------------------------------------
     Total assets                                               $9,174,707               $644,153,124           $59,971,022
===================================================================================================================================



-----------------------------------------------------------------------------------------------------------------------------------
                                                             Asset            Corporate                             Total
                                                           Protection         and Other        Adjustments      Consolidated
-----------------------------------------------------------------------------------------------------------------------------------

Investments and other assets                               $26,970,757        $119,778,922       $119,940        $766,956,073
Deferred policy acquisition costs                            1,308,682                                             94,521,081
-----------------------------------------------------------------------------------------------------------------------------------
     Total assets                                          $28,279,439        $119,778,922       $119,940        $861,477,154
===================================================================================================================================



                                                                       Operating Segment Assets
                                                                           December 31, 2003
-----------------------------------------------------------------------------------------------------------------------------------
                                                                   Life
                                                                 Marketing                Acquisitions            Annuities
-----------------------------------------------------------------------------------------------------------------------------------

Investments and other assets                                   $3,114,579                $580,346,285          $57,121,591
Deferred policy acquisition costs                               2,114,680                  89,265,855            2,292,570
-----------------------------------------------------------------------------------------------------------------------------------
     Total assets                                              $5,229,259                $669,612,140          $59,414,161
===================================================================================================================================



-----------------------------------------------------------------------------------------------------------------------------------
                                                             Asset            Corporate                             Total
                                                           Protection         and Other        Adjustments      Consolidated
-----------------------------------------------------------------------------------------------------------------------------------

Investments and other assets                               $43,040,563       $106,236,317        $122,046         $789,981,381
Deferred policy acquisition costs                            1,495,557                                              95,168,662
-----------------------------------------------------------------------------------------------------------------------------------
     Total assets                                          $44,536,120       $106,236,317        $122,046         $885,150,043
===================================================================================================================================`

NOTE D  STATUTORY
REPORTING PRACTICES

Financial
statements prepared in conformity with GAAP differ in some respects from the statutory
accounting practices prescribed or permitted by insurance regulatory authorities. In
accordance with statutory reporting practices, at September 30, 2004, and for the nine
months then ended, the Company had capital and surplus of $119.8 million and net income of
$10.2 million. At September 30, 2004, the asset valuation reserve held by the Company
was $5.9 million.

NOTE E 
COMPREHENSIVE INCOME

The
following table sets forth the Companys comprehensive income for the periods shown:

`THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                         SEPTEMBER 30                    SEPTEMBER 30
                                                                      2004            2003            2004            2003
-------------------------------------------------------------------------------------------------------------------------------

Net Income                                                       $  2,816,022      $ 3,596,760    $ 9,284,361     $11,540,911
Change in net unrealized gains/losses
   on investments (net of income tax:
   three months: 2004 - $6,964,464; 2003 - $(3,182,797)
   nine months: 2004 - $2,559,002; 2003 - $6,092,176)              12,934,004       (5,910,909)     4,752,433      11,314,041
Reclassification adjustment for amounts
   included in net income (net of income tax:
   three months: 2004 - $(128,715); 2003 - $(387,111);
   nine months: 2004 - $(146,375); 2003 - $(1,184,597))              (239,041)        (718,920)      (271,840)     (2,199,965)
-------------------------------------------------------------------------------------------------------------------------------
Comprehensive income                                              $15,510,985      $(3,033,069)   $13,764,954     $20,654,987
===============================================================================================================================`

NOTE F  RECENTLY
ISSUED ACCOUNTING STANDARDS

In
July 2003, the American Institute of Certified Public Accountants issued Statement of
Position (SOP) 03-1, Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts. SOP 03-1 is
effective for fiscal years beginning after December 15, 2003. SOP 03-1 provides guidance
related to the establishment of reserves for benefit guarantees provided under certain
long-duration contracts, as well as the accounting for mortality benefits in certain
universal life products. In addition, it addresses the capitalization and amortization of
sales inducements to contract holders. The adoption of SOP 03-1 had no impact on the
Companys financial position or results of operations.

# ITEM 2.
MANAGEMENTS NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

Protective
Life and Annuity Insurance Company (the Company), a stock life insurance
company, was founded in 1978. Since 1983, all outstanding shares of the Companys
common stock have been owned by Protective Life Insurance Company
(Protective), which is a wholly owned subsidiary of Protective Life
Corporation (PLC), an insurance holding company whose common stock is traded
on the New York Stock Exchange under the symbol PL. All outstanding shares of
the Companys preferred stock are owned by PLC. The Company is authorized to transact
insurance business as an insurance company or a reinsurance company in 49 states,
including New York.

In
accordance with General Instruction H(2)(a), the Company includes the following analysis
with the reduced disclosure format.

For
a more complete understanding of the Companys business and its current period
results, please read the following Managements Narrative Analysis of the Results of
Operations in conjunction with the Companys latest annual report on Form 10-K and
other filings with the SEC.

PLC,
through its subsidiaries, provides financial services through the production,
distribution, and administration of insurance and investment products. PLC, through its
subsidiaries, operates several business segments each having a strategic focus. An
operating segment is generally distinguished by products and/or channels of distribution.

The
Company, since it is licensed in the State of New York, is the entity through which PLC
markets, distributes, and services insurance and annuity products in New York. As of
September 30, 2004, the Company was involved in the businesses of four of PLCs
operating segments: Life Marketing, Acquisitions, Annuities, and Asset Protection. The
Company also has an additional segment referred to as Corporate and Other.

Protective
has entered into an intercompany guaranty agreement, enforceable by the Company or its
successors, whereby Protective has guaranteed the Companys payment of claims made by
the holders of Company policies according to the terms of such policies. The guarantee
will remain in force until the earlier of (a) when the Company achieves a claims-paying
rating equal to or better than Protective without the benefit of any intercompany guaranty
agreement or (b) 90 days after the guaranty agreement is revoked by written instrument;
provided, however, even after any revocation or termination by such notice, the guarantee
shall remain effective as to policies issued during the existence of the guaranty
agreement.

This
report reviews the Companys financial condition and results of operations including
its liquidity and capital resources. Historical information is presented and discussed.
Where appropriate, factors that may affect future financial performance are also
identified and discussed. Certain statements made in this report include
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include any statement that may
predict, forecast, indicate or imply future results, performance or achievements instead
of historical facts and may contain words like believe, expect,
estimate, project, budget, forecast,
anticipate, plan, will, shall,
may, and other words, phrases, or expressions with similar meanings.
Forward-looking statements involve risks and uncertainties which may cause actual results
to differ materially from the results contained in the forward-looking statements, and the
Company cannot give assurances that such statements will prove to be correct. Given these
risks and uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results. Please refer to Exhibit 99(a), incorporated
by reference herein, for more information about factors which could affect future results.

The
Companys results may fluctuate from period to period due to fluctuations in
mortality, persistency, claims, expenses, interest rates, and other factors. Therefore, it
is managements opinion that quarterly operating results for an insurance company are
not necessarily indicative of results to be achieved in future periods, and that a review
of operating results over a longer period is necessary to assess an insurance
companys performance.

Revenues

The
following table sets forth revenues by source for the periods shown:

`----------------------------------------------------------------------------------------------------------------------------
                                                                 THREE MONTHS ENDED                   NINE MONTHS ENDED
                                                                    SEPTEMBER 30                        SEPTEMBER 30
                                                               2004               2003              2004             2003
   ----------------------------------------------------------------------------------------------------------------------------

   Premiums and policy fees, net of reinsurance             $ 6,216,406        $ 6,429,752        $19,339,108    $19,899,674
   Net investment income                                      9,871,369          9,840,689         30,221,274     30,698,992
   Realized investment gains                                    367,756          1,106,032            418,215      3,384,562
   Other income                                                  17,303              6,545             37,926        149,199
   ----------------------------------------------------------------------------------------------------------------------------
                                                            $16,472,834        $17,383,018        $50,016,523    $54,132,427
   ============================================================================================================================`

Premiums
and policy fees, net of reinsurance (premiums and policy fees) decreased $0.6
million or 2.8% in the first nine months of 2004 from the first nine months of 2003.
Premiums and policy fees in the Acquisitions Division are expected to decline with time
unless new acquisitions are made. No acquisitions were made in this Division in 2003 or
the first nine months of 2004, therefore decreases in older acquired policies resulted in
a decrease of $0.7 million in the first nine months of 2004 as compared with the
first nine months of 2003. The Asset Protection segment had a decrease of $0.1 million in
premiums and policy fees in the first nine months of 2004 compared to the same period of
2003. Premiums and policy fees in the Annuities segment remained relatively flat in the
first nine months of 2004 as compared to 2003, while premiums and policy fees in the Life
Marketing segment increased $0.2 million for the same period.

Net
investment income in the first nine months of 2004 decreased by $0.5 million as compared
to the corresponding period of the preceding year primarily due to a decrease in the
average amount of invested assets. The percentage earned on average cash and investments
was 6.0% in the first nine months of 2004 compared to 5.8% in the same period of 2003.

The
Company generally purchases its investments with the intent to hold to maturity by
purchasing investments that match future cash-flow needs. The sales of investments that
have occurred generally result from portfolio management decisions to maintain proper
matching of assets and liabilities. Accordingly, the Company has classified its fixed
maturities and certain other securities as available for sale.

Realized
investment gains were $0.4 million in the first nine months of 2004 compared to $3.4
million in the first nine months of 2003. During the first nine months of 2004, the
Company recorded $0.2 million of other-than-temporary impairments on its investments as
compared to $0.3 million in the first nine months of 2003.

Each
quarter the Company reviews investments with material unrealized losses and tests for
other-than-temporary impairments. Management analyzes various factors to determine if any
specific other-than-temporary asset impairments exist. Once a determination has been made
that a specific other-than-temporary impairment exists, a realized loss is recognized and
the cost basis of the impaired asset is adjusted to its fair value. An
other-than-temporary impairment loss is recognized based upon all relevant facts and
circumstances for each investment. With respect to unrealized losses due to
issuer-specific events, the Company considers the creditworthiness and financial
performance of the issuer and other available information. With respect to unrealized
losses that are not due to issuer-specific events, such as losses due to interest rate
fluctuations, general market conditions or industry-related events, the Company considers
its intent and ability to hold the investment to allow for a market recovery or to
maturity together with an assessment of the likelihood of full recovery.

Income Before Income Tax
and Segment Operating Income

Consistent
with the Companys segment reporting in the Notes to Condensed Financial Statements,
management evaluates the results of the Companys segments on a before-income-tax
basis as adjusted for certain items which management believes are not indicative of the
segments core operations. Segment operating income (loss) excludes net realized
investment gains and losses because fluctuations in these items are due to changes in
interest rates and other financial market factors instead of mortality and morbidity.
Also, segment operating income (loss) excludes discontinued operations, extraordinary
items, and the cumulative effect of changes in accounting principles. Although the items
excluded from segment operating income (loss) may be significant components in
understanding and assessing the Companys overall financial performance, management
believes that segment operating income (loss) enhances an investors understanding of
the Companys results of operations. The Companys segment operating income
measures may not be comparable to similarly titled measures reported by other companies.

The
following table sets forth operating income or loss and income or loss before income tax
by business segment for the periods shown:

`OPERATING INCOME (LOSS) AND INCOME (LOSS) BEFORE INCOME TAX
------------------------------------------------------------------------------------------------------------------------------
                                                                     THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                         SEPTEMBER 30                    SEPTEMBER 30
                                                                    2004            2003             2004           2003
------------------------------------------------------------------------------------------------------------------------------
Operating income (loss)
  Life Marketing                                                 $  242,560      $  378,112       $   569,125    $   460,725
  Acquisitions                                                    1,722,016       2,198,250         7,373,232      7,985,498
  Annuities                                                          76,839        (164,689)           23,996       (308,234)
  Asset Protection                                                  223,835         325,647           556,257        540,163
  Corporate and Other                                             1,537,322       1,687,436         5,165,432      5,671,647
------------------------------------------------------------------------------------------------------------------------------
Realized investment gains (losses)
  Annuities                                                          26,982         112,670           248,743        262,490
  Corporate and Other                                               340,774         993,362           169,472      3,122,072
------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income tax
  Life Marketing                                                    242,560         378,112           569,125        460,725
  Acquisitions                                                    1,722,016       2,198,250         7,373,232      7,985,498
  Annuities                                                         103,821         (52,019)          272,739        (45,744)
  Asset Protection                                                  223,835         325,647           556,257        540,163
  Corporate and Other                                             1,878,096       2,680,798         5,334,904      8,793,719
------------------------------------------------------------------------------------------------------------------------------
       Total income before income tax                            $4,170,328      $5,530,788       $14,106,257     $17,734,361
==============================================================================================================================`

The
Life Marketing segment had pretax operating income of $0.6 million in the first nine
months of 2004 as compared to $0.5 million in the same period of 2003. The Company began
operations in the Life Marketing segment in 2002. The increase in income is primarily
attributable to growth of life insurance business-in-force.

Pretax
operating income from the Acquisitions segment was $7.4 million in the first nine months
of 2004 as compared to $8.0 million in the same period of 2003. Earnings from the
Acquisitions segment are expected to decline over time (due to the lapsing of policies
resulting from deaths of insureds or terminations of coverage) unless new acquisitions are
made. There were no new acquisitions made in 2003 or in the first nine months of 2004.

The
Annuities segment had a pretax operating gain of less than $0.1 million in the first nine
months of 2004 as compared to a pretax operating loss of $0.3 million in the same period
of 2003.  Volatile equity markets could negatively affect the fees the segment assesses on
variable annuity contracts. Lower interest rates could negatively affect sales of fixed
annuities. In this segment, equity market volatility may create uncertainty regarding the
future results in the variable annuity business and the related rate of amortization of
deferred policy acquisition costs. Also, beginning January 2003, the Company is no longer
marketing variable annuity products.

The
Asset Protection segments pretax operating income was $0.6 million in the first nine
months of 2004, as compared to $0.5 million in the first nine months of 2003. The increase
is primarily due to lower benefit and settlement expenses partially offset by higher
operating expenses.

The
Corporate and Other segment consists of net investment income and expenses not identified
with the preceding business segments. Pretax operating income from this segment was $5.2
million in the first nine months of 2004 as compared to $5.7 million in the first nine
months of 2003, primarily due to decreases in net investment income and other income and
higher expenses not allocated to other segments.

Income Taxes

The
following table sets forth the effective tax rates for the periods shown:

`-------------------------------------------------------------------------------------------------------------------------------
                                                                  THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                                     SEPTEMBER 30                       SEPTEMBER 30
                                                                 2004             2003             2004             2003
-------------------------------------------------------------------------------------------------------------------------------

         Effective Income Tax Rates                              32.5%            35.0%            34.2%            34.9%
-------------------------------------------------------------------------------------------------------------------------------`

The
effective income tax rate for the full year of 2003 was 34.9%. Managements estimate
of the effective income tax rate for the full year of 2004 is approximately 34.9%.

Net Income

The
following table sets forth net income for the periods shown:

`-------------------------------------------------------------------------------------------------------------------------------
                                                                   THREE MONTHS ENDED                NINE MONTHS ENDED
                                                                      SEPTEMBER 30                      SEPTEMBER 30
                                                                  2004             2003             2004             2003
-------------------------------------------------------------------------------------------------------------------------------

         Net Income                                             $2,816,022     $3,596,760        $9,284,361      $11,540,911
-------------------------------------------------------------------------------------------------------------------------------`

Compared
to the same period in 2003, net income in the first nine months of 2004 decreased $2.3
million, reflecting increases in operating income in the Life Marketing, Annuities, and
Asset Protection segments, which were offset by decreases in the Acquisitions and
Corporate and Other segments and lower realized investment gains.

Item 4. Controls and
Procedures

(a)       
          Evaluation of disclosure controls and procedures

Under
the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our
disclosure controls and procedures and internal control over financial reporting and
concluded that our disclosure controls and procedures were effective as of September 30,
2004. It should be noted that any system of controls, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance that the control
systems objectives will be met. Further, the design of any control system is based
in part upon certain judgments, including the costs and benefits of controls and the
likelihood of future events. Because of these and other inherent limitations of control
systems, no evaluation of controls can provide absolute assurance that all control issues,
if any, within the Company have been detected.

(b)    
          Changes in internal control over financial reporting

No
significant changes in our internal control over financial reporting occurred during the
quarter ended September 30, 2004 that have materially affected, or is reasonably likely to
materially affect, such internal control over financial reporting. Our internal controls
exist within a dynamic environment and the Company continually strives to improve its
internal controls and procedures to enhance the quality of its financial reporting.

# PART II

Item 6. Exhibits

(a)    
          Exhibit 31(a)  Certification Pursuant to Section 302 of the Sarbanes-Oxley
          Act of 2002.

Exhibit
31(b)  Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit
32(a)  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit
32(b)  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit
99  Safe Harbor for Forward-Looking Statements.

# SIGNATURE

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.

# Protective Life and
Annuity Insurance Company

`Date:      November 15, 2004                         /s/ Steven G. Walker                                       
                                                        Steven G. Walker
                                                        Senior Vice President, Controller
                                                        and Chief Accounting Officer
                                                        (Duly authorized officer)`